iPad is a real step forward for Apple

Mar 1 2010 Anthony Peart, Brewin Dolphin

INNOVATION is central to the success of technology businesses and staying one step ahead of the competition is fundamental to retaining a competitive advantage and indeed, barriers to entry.

With this in mind, Apple recently announced the launch of a new product in its impressive range of personal computers.

The iPad is one of the first in the highly-anticipated concept of tablet computers. Its aim is to bridge the gap between the smartphone and the laptop, or indeed the net book, and Apple may benefit from being one of the first companies to launch a product in this space.

It is a surprising piece of technology, having a 9.7 inch LED screen, but only measuring half an inch in depth. However, it is the functionality of the iPad that captures the imagination.

Not only does it pack a punch with a robust processor, it also enables the user to surf the internet in comfort, watch movies, listen to music, edit photos and read ebooks.

It is this last point that has perked the interest of many customers and may present Apple with an introduction into a new and potentially lucrative market.

At present, there are a number of very good ebook readers on the market, including Amazon’s Kindle and Sony’s Touch. As a starting point, Apple intends to launch an iBook store that can be accessed by the iPad and, more importantly, a number of leading publishers have already signed up. Ebooks are a relatively new concept and rivals are already jostling for position.

Apple has made a great deal of headway through its market-leading iTunes store and the group aims to reproduce this success with iBook.

Although the iPad has received mixed reviews, it certainly appears to be a step forward for Apple and the aim is to emulate the success of the highly popular iPhone.

Looking closer to home, UK technology specialist Arm Holdings could be in line to benefit from the growth of the technology sector.

Although it has not been confirmed, it is believed that the processing chip used in the iPad is based on Arm’s technology.

The company specialises in the design of cutting-edge microchips that are used in many products including the new breed of smartphones. Arm is not involved in the manufacture of the microchips, but charges a license fee for the use of the company’s designs.

Naturally, the more complex the design, such as the microchips that are used in smartphones, the higher the license fee.

Despite its dominance in the mobile phone market, Arm has been keen to diversify its business model and has expanded into new areas. Indeed, the company’s microchips can be found in everything from white goods to children’s toys.

Arm has recently been promoted to the FTSE100 index, highlighting the success of the business.